I’m the CEO and founder of Root Capital, a nonprofit agricultural lender that builds rural prosperity in the developing world. I began my career on Wall Street in Latin American corporate finance. Later, I had a brief stint as a journalist on the business beat in Mexico, where I became familiar with the challenges faced by agri-businesses and small-scale farmers who lacked access to capital and markets. I was on my way to Harvard Business School in the late nineties, when I took a detour and founded Root Capital. Since then, we’ve grown to over 100 employees, with clients across Latin America and Africa, and $100 million in assets. I’m a Skoll Fellow, an Ashoka Global Fellow, and was named a Young Global Leader by the World Economic Forum in 2008 and one of Forbes’ “Impact 30” in 2011. I currently belong to the 2012 Henry Crown Fellowship Class of the Aspen Institute. As for academic credentials, I’ve got an M.S. in development economics from the London School of Economics and a B.A. from Yale University.

What My Great Grandfather Taught Me About Climate Change And Agriculture

Peruvian coffee farmer Maria Eufemia Madonado Ocaño holds a leaf from a coffee tree on her farm that is infected with rust. “My coffee was beautiful,” she said. “And then it all dried up. It never matured, and it lost all its leaves.” Photo credit: Grazioso, Inc

My family has deep roots in Arkansas, where not too long ago farmers lost $500 million in flood damages. My great grandfather, Jay Fulbright, was a simple country banker to poultry and pig farmers around Fayetteville. He might have been wiped out by those epic floods, which submerged more than one million acres of cropland.

Following in his footsteps, I’m an agricultural lender, not in Arkansas, but in sub-Saharan Africa and the Americas, and I’m worried. Recent droughts across central Africa have decreased crop yields by 14% to 46%. Coffee farmers in Latin America lost close to $1 billion in revenues last year as a result of a devastating fungal disease called coffee rust, or la roya.

While climate change may not be the only factor in these disasters, a leaked document from the United Nations Intergovernmental Panel on Climate Change stated last week that rising temperatures may reduce global food production by as much as 2% every decade for the rest of this century, while demand is expected to rise by as much as 14%. This is bad news for everyone, but especially for communities that depend upon agriculture as their primary source of income.

Undoubtedly, the hardest hit will be smallholder farmers in the developing world who constitute 75% of the 2.6 billion people living on less than $2 a day. When the agricultural supply chain is disrupted – by climate change, or a variety of other variables including political unrest, lack of access to funding or supplies, unpredictable weather – the balance can be tipped and life for smallholder farmers at the base of the value chain becomes even more precarious.

Coffee Rust provides a window into current concerns about climate change and its economic and social impacts on farmers and consumers. “Coffee is the canary in the goldmine for climate change,” said Ric Reinhardt, director of the Specialty Coffee Association of America, earlier this year. “Coffee plantations are sensitive to changes in temperature, rainfall, and wind pattern.”

Sixty percent of the world’s coffee is produced in Latin America’s mountainous regions, which are seeing the worst roya epidemic in 40 years concurrent with warmer, wetter weather. Already, more than half of Central America’s coffee farms are infected and the International Coffee Organization estimates that more than 400,000 people became jobless after the 2012-2013 season.

“If you can’t think about the long term risk (of climate change) for planetary impacts, think about the short term risk for your coffee,” Reinhardt added. Coffee highlights climate change’s potential for disrupting fragile agricultural systems across all borders.

Crises often illuminate gaps in a system, and the roya epidemic has shown, glaringly, that unless the bottom rungs of the agricultural ladder are shored up – if resiliency isn’t built in – entire agricultural supply chains are at risk of collapse. In response to the urgency of the roya crisis, Green Mountain Coffee Roasters, Inc., the Multilateral Investment Fund of the Inter-American Development Bank, and the Skoll Foundation, have partnered with Root Capital to implement the innovative $7 million Coffee Farmer Resilience Initiative. This initiative takes a holistic approach to the current crisis, investing in rural enterprises’ ability to maintain consumer supply in the face of growing shocks from climate change and volatile commodity markets. And while this initiative is focused on coffee, it’s a blueprint for agricultural supply chain sustainability across the globe.

The initiative, says Claudio Cortellese, Head of the Access to Markets Unit of the Multilateral Investment Fund, “has big implications for agricultural sustainability.”

For decades, socially responsible businesses have been leaders at greening their supply chains, improving labor conditions, reducing their carbon footprints, and increasing their transparency. There are now many safeguards in place to ensure that products from a wide range of the world’s smallholder farms are sustainably sourced. But that’s no longer enough. The farmers need to be able to sustain themselves, developing tools for increased resilience. Otherwise the supply chain will be broken at its very first link.

The Coffee Farmer Resilience Initiative is a multi-pronged approach that provides rural enterprises—the hub of farm communities—with the tools they need to manage complicated crises like the roya epidemic. It provides a foundation for long-term sustainability even in the event of future disasters, catastrophic crop diseases, or on-going effects of climate change. And by ensuring the continuity of supply, both farmers and businesses are protected.

“We depend on a long-term supply of high-quality beans for our business,” said Lindsey Bolger, Vice President of Coffee Sourcing Excellence for GMCR. “This investment will provide coffee farming families with the tools and capacity they need to more successfully confront threats to their coffee and their livelihoods through greater long-term resilience at the cooperative and household level.”

From Africa to Latin America to Arkansas, farmers are facing climate challenges that are only going to increase. Building resiliency from the ground up is the new frontier of supply chain sustainability–and it’s a path that I believe my great grandfather would have approved.

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